gold to average $1,180 an ounce in 2015

British Bank Barclays is expecting gold prices to average $1,180 an ounce this year, down from their 2014 average forecast of $1,271 an ounce.

According to Barclays, the outlook for the yellow metal has become more divided but she still sees more downside risk this year as the U.S. dollar remains strong and oil prices remain weak. Gold’s correlation with oil prices and EUR/USD has strengthened, hitting about 40% in the last three months, “and combined with our view for a U.S. rate hike in mid-2015, gold is set to come under significant pressure.

Russian gold reserves could be a risk to the market in 2015. Despite growing speculation, Russia has managed to hold on to its gold but that could change as Barclays expects weaker oil prices to continue to pressure the ruble.

“China should offer some support to the downside, particularly as demand tends to gather momentum six weeks ahead of the Lunar New Year. We maintain our view that gold finds a stronger floor if demand is robust across both India and China,” said Suki Cooper, director of precious metals research at Barclays.